Court Snuffs Smokeless Tobacco Appeal

Published 2:03 pm, Monday, April 25, 2016

The nation's No. 1 snuff manufacturer lost a Supreme Court appeal Monday and must pay $1.05 billion for stifling competition.

The justices, without comment, left undisturbed a 2000 decision by a Kentucky jury against United States Tobacco Co., which makes Skoal and Copenhagen.

The company had been sued by a rival and accused of breaking antitrust laws. Conwood Co. claimed that U.S. Tobacco salesmen removed Conwood display racks from stores and hid competitors' products. Conwood's snuff brands include Kodiak and Cougar.

Lawyers for U.S. Tobacco, based in Greenwich, Conn., told justices in court filings that the company only used aggressive promotions and that the case "will impede vigorous competition by dominant firms and provide an open invitation for speculative damage claims."

Attorneys for the Memphis, Tenn.-based Conwood said the verdict followed a monthlong trial that included ample evidence that Conwood's sales were hurt by U.S. Tobacco tactics.

Snuff is a finely chopped tobacco typically placed between the gum and cheek or lower lip. Much of the nation's smokeless tobacco is grown in western Kentucky, where the trial took place.

A jury ordered U.S. Tobacco to pay $350 million to Conwood. Under federal antitrust laws, the award was tripled. An appeals court upheld the verdict last May.